Vinci Partners(VINP) - 2024 Q4 - Annual Report

Company Overview Vinci Compass is a leading Latin American alternative asset manager, investing across diverse real and financial assets and providing advisory services Introduction to Vinci Compass Vinci Compass is a leading Latin American alternative asset manager, focusing on tangible income-generating assets and high-value financial and strategic advisory services - Vinci Compass is a leading full-service alternative asset manager in Latin America, managing R$327 billion in assets under management (AUM)[4][5] - The company's business encompasses diversified strategies including private equity, credit, real assets, equities, and corporate advisory[5] Geographic Presence and Scale Vinci Compass operates across 7 Latin American countries, plus the US and UK, with over 600 employees and 25+ years of investment experience - The company has offices in 7 Latin American countries (plus the US and UK) with over 600 employees, offering over 25 years of investment solutions experience[7] - It provides tailored local products and global investment solutions through "local-to-local," "local-to-global," "global-to-local," and "global-to-regional" models[7] Diversified Exposure and Client Profile Vinci Compass maintains diversified AUM and Fee Related Revenues across countries, business segments, and client types, with Brazil and institutional clients dominating AUM and Fee-Related Revenue Distribution by Country, Business Segment, and Client Type (as of December 2024) | Category | Brazil (%) | Chile (%) | Mexico (%) | Global (%) | Other LatAm Countries (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | AUM | 40% | 16% | 13% | 23% | 8% | | Fee-Related Revenue | 50% | 14% | 16% | 17% | 3% | | Category | Private Equity (%) | Credit (%) | Corporate Advisory (%) | Real Assets (%) | Equities (%) | Global IP&S (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | AUM | 5% | 9% | 1% | 4% | 4% | 78% | | Fee-Related Revenue | 11% | 19% | 6% | 11% | 7% | 46% | | Category | Institutional (%) | High Net Worth Individuals (HNWI) (%) | Intermediaries (%) | Public Market Vehicles (%) | | :--- | :--- | :--- | :--- | :--- | | AUM | 59% | 20% | 19% | 2% | | Fee-Related Revenue | 64% | 22% | 18% | 0% | Client Relations and Distribution The company has an expert distribution team of over 80 client relationship managers across 8 countries, effectively distributing proprietary products and offering solutions - The client relations team comprises over 80 client relationship managers across 8 countries, including Argentina/Uruguay, Brazil, Chile, Mexico, Peru/Colombia, and the US[10][11] - The team possesses deep expertise in alternative products and global investments, with unique institutional coverage for distributing proprietary products[12][13] Vinci Compass Ecosystem and Competitive Advantage Vinci Compass leverages its unique ecosystem for superior sourcing and execution, ensuring seamless strategy implementation, continuity, and enhanced fundraising capabilities Unique Ecosystem for Sourcing and Execution Vinci Compass's unique ecosystem, built on extensive networks and shared services, enables superior sourcing and execution, ensuring seamless strategy implementation and enhanced fundraising - The company expands its sourcing channels through an extensive network of over 40 partners and senior professionals, coupled with over 20 years of local operating experience[15] - A robust platform with over 24 strategies maximizes investment inflows, leveraging knowledge sharing and multidisciplinary expertise through strong research, macro, operational, legal, and compliance resources[15] - The company emphasizes a strong cultural fit and an independent investment team model, ensuring seamless execution and strategy continuity, while enhancing new fund fundraising capabilities through its ecosystem's track record and institutionalization[15] Business Segments Vinci Compass operates diverse business segments including Global IP&S, Credit, Private Equity, Equities, Real Assets, and Corporate Advisory, forming a comprehensive alternative asset management platform Global Investment Products and Solutions (Global IP&S) Global IP&S manages R$255 billion in assets, offering customized global and local investment solutions through a network of world-class GPs and top asset managers - Global IP&S manages R$255 billion in assets under management (AUM)[16][17] Global IP&S Fee-Related Revenue and AUM Distribution | Category | Global (%) | Brazil (%) | Mexico (%) | Chile (%) | Uruguay (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Fee-Related Revenue (by Country) | 40% | 30% | 6% | 7% | 1% | | Category | TPD Liquid Products (%) | TPD Alternative Products (%) | Fund of Funds (%) | Brokerage (%) | Segregated Accounts (%) | Other (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fee-Related Revenue (by Product Type) | 13% | 21% | 22% | 18% | 5% | 1% | | Category | Institutional (%) | High Net Worth Individuals (HNWI) (%) | Intermediaries (%) | Pension Plans (%) | | :--- | :--- | :--- | :--- | :--- | | AUM (by Client Type) | 64% | 20% | 15% | 1% | Credit The Credit business manages R$29 billion in assets, offering a diversified credit platform with local and hard currency strategies across various sectors - The Credit business manages R$29 billion in assets under management (AUM)[18][19] - Credit strategies include local and hard currency private and liquid credit, structured credit, and capital solutions, covering high-grade, high-yield, infrastructure, real estate, and agribusiness sectors[19] Credit AUM Geographic and Client Type Distribution | Category | Brazil (%) | LatAm (%) | Argentina (%) | Mexico (%) | Peru (%) | Chile (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | AUM (by Geography) | 44% | 15% | 12% | 8% | 24% | 3% | | Category | Institutional (%) | Intermediaries (%) | High Net Worth Individuals (HNWI) (%) | Public Market Vehicles (%) | | :--- | :--- | :--- | :--- | :--- | | AUM (by Client Type) | 50% | 32% | 12% | 6% | Private Equity The Private Equity business manages R$17 billion in assets, primarily through VCP and VIR strategies, covering growth, buyouts, and impact investments with ESG integration - The Private Equity business manages R$17 billion in assets under management (AUM)[20][21] - Key strategies include VCP (growth, buyouts) and VIR (minority growth, transformation, impact), integrating ESG criteria for long-term value and positive social impact[21] Private Equity Key Performance Indicators and Client Type Distribution | Metric | VCP Strategy | VIR Strategy | | :--- | :--- | :--- | | Company Size | R$100-500 million EV | R$1-2 billion EV | | Gross IRR | 22.4% | 10% | | Gross MOIC | 2.5x | 1.6x | | Client Type | Institutional (%) | High Net Worth Individuals (HNWI) (%) | Intermediaries (%) | | :--- | :--- | :--- | | Client Type Distribution | 64.6% | 23% | 10% | Equities The Equities business manages R$14 billion in assets, focusing on publicly traded companies in Latin America and specific countries, utilizing regional expertise for various strategies - The Equities business manages R$14 billion in assets under management (AUM)[22] - Strategies include Latin American equities and country-specific equities, such as long-only, dividend, and small-cap strategies in Brazil, Chile, and Argentina[22] - Institutional investors comprise 85% of the investor base[22] Real Assets The Real Assets business manages R$12 billion in assets, investing in tangible income-generating assets like forestry, real estate, and infrastructure across Latin America - The Real Assets business manages R$12 billion in assets under management (AUM)[23][24] - Strategies encompass forestry (eucalyptus, pine, native forests, carbon credits), real estate (seven listed REITs in the Brazilian stock market, opportunistic development), and infrastructure (power, water, sanitation, transportation, and logistics)[24] Real Assets Client Type Distribution | Client Type | Institutional (%) | High Net Worth Individuals (HNWI) (%) | Intermediaries (%) | Public Market Vehicles (%) | | :--- | :--- | :--- | :--- | :--- | | Client Type Distribution | 47% | 42% | 7% | 1% | Corporate Advisory The Corporate Advisory team provides multi-industry M&A, financing, and capital markets advisory services, specializing in diverse sectors with experienced professionals - Corporate advisory services cover M&A (total/partial acquisitions, joint ventures, mergers), financing (equity offerings, debt issuances), and capital markets (IPOs, follow-ons, distributable securities offerings)[26] - The team has accumulated over R$161 billion in M&A transactions, over R$60 billion in financing transactions, and over R$40 billion in capital markets transactions[26] - Services span a wide range of industries, including consumer & retail, oil & gas distribution, healthcare, real estate, financial services, logistics & transportation, technology, energy, and mining[26] Financial Highlights and Strategic Fundraising Vinci Compass achieved significant growth in Q4 2024, with AUM increasing by 377% to R$327 billion, driven by strategic acquisitions and robust fundraising across initiatives Fourth Quarter & Full Year 2024 Highlights In Q4 2024, AUM grew 377% to R$327 billion, driven by acquisitions; the company secured R$1.4 billion in new commitments and R$21.9 million in PRE - In Q4 2024, AUM increased by 377% year-over-year, reaching R$327 billion, primarily driven by the acquisitions of Compass and Lacan[31] - The company secured R$1.4 billion in new commitments during Q4, including the first closing of SPS IV and the final closing of VCP IV, making it the largest private equity fund in the company's history at R$3.1 billion[31] - For fiscal year 2024, performance-related earnings (PRE) totaled R$21.9 million[31] Strategic Fundraising - Cross-Border Initiatives The company actively pursues cross-border fundraising, with VICC fund reaching 70% of its target, SPS Vintage IV completing its first closing, and plans for VIR V and UCITS platforms - The VICC fund has reached 70% of its fundraising target, attracting strong interest from international investors[33] - SPS Vintage IV successfully completed its first closing in Q4 2024, primarily from reinvestments by existing funds and commitments from local High Net Worth Individuals (HNWIs)[33] - The fourth fund for the forestry strategy is expected to finalize its closing by year-end, receiving positive responses from European LPs[33] - Plans for 2025 include launching the VIR V fund to expand impact investment strategies and developing a UCITS listed equities platform offering daily liquidity[33] Strategic Fundraising - Local-to-Local Initiatives The company expands in local markets, advancing MAV III and open-ended credit products in Brazil, fundraising in Peru, Chile, and Colombia, and planning new real estate products - In Brazil, MAV III and open-ended credit products, including the flagship VCE fund, are being advanced[35] - Fundraising for existing strategies (e.g., closed-end senior secured loans and public/private credit funds) is underway in Peru and Chile; in Colombia, the first closed-end senior secured loan fund, COPCO I, is being structured[35] - A structured private credit fund is being established in Mexico, entering the factoring and accounts receivable financing sectors[35] - Global IP&S plans to launch VSP II (fund of funds) and VSP semi-liquid funds in 2025, alongside new real estate products in Brazil for industrial warehousing and residential sectors[35] Financial Performance and AUM Analysis Vinci Compass demonstrated strong financial performance in Q4 and FY2024, with significant growth in Fee Related Revenues and AUM, driven by strategic acquisitions and organic fundraising Segment Earnings Overview (4Q24 & FY24) In Q4 2024, total Fee Related Revenues increased by 84% to R$218.4 million, and FRE grew by 38% to R$79 million; full-year revenues grew 30% to R$563.6 million, and FRE grew 19% to R$248.4 million Fourth Quarter & Full Year 2024 Key Financial Metrics | Metric (R$ million) | 4Q'23 | 3Q'24 | 4Q'24 | YoY Change (%) | FY23 | FY24 | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 99.98 | 106.75 | 170.19 | 70% | 393.37 | 487.53 | 24% | | Net Advisory Fees | 19.00 | 5.97 | 40.33 | 112% | 39.80 | 68.13 | 71% | | Total Fee Related Revenues | 118.97 | 112.72 | 218.45 | 84% | 433.17 | 563.59 | 30% | | Total Fee Related Expenses | (61.68) | (58.90) | (139.42) | 126% | (224.73) | (315.19) | 40% | | Fee Related Earnings (FRE) | 57.30 | 53.82 | 79.03 | 38% | 208.43 | 248.40 | 19% | | FRE Margin (%) | 48.2% | 47.7% | 36.2% | - | 48.1% | 44.1% | - | | FRE per Share (R$/share) | 1.07 | 1.02 | 1.23 | 16% | 3.86 | 4.42 | 15% | | Performance Related Earnings (PRE) | 2.85 | 0.98 | 16.48 | 478% | 10.61 | 21.84 | 106% | | Segment Distributable Earnings (DE) | 65.28 | 59.34 | 109.15 | 67% | 238.93 | 307.45 | 29% | | Distributable Earnings (DE) | 62.01 | 53.38 | 35.39 | (43)% | 244.21 | 183.86 | (25)% | | Adjusted Distributable Earnings (Adjusted DE) | 63.64 | 57.10 | 73.95 | 16% | 245.84 | 239.06 | (3)% | | Adjusted DE per Share (R$/share) | 1.18 | 1.08 | 1.15 | (2)% | 4.54 | 4.26 | (6)% | Assets Under Management (AUM) and Capital Subscriptions As of December 31, 2024, total AUM reached R$326.9 billion, a 377% increase, driven by acquisitions and organic fundraising, with R$3.4 billion in capital subscriptions - As of Q4 2024, total Assets Under Management (AUM) stood at R$326.9 billion, representing a 377% year-over-year increase, primarily driven by the Lacan acquisition and Compass merger[39][40] - AUM also benefited from organic fundraising in private equity (VCP IV final closing) and credit (SPS IV first closing)[40] Total Capital Subscriptions for Fiscal Year 2024 | Business Segment | Share (%) | Amount (R$ billion) | | :--- | :--- | :--- | | Private Equity | 51% | | | Global IP&S | 28% | | | Credit | 16% | | | Real Assets | 5% | | | Total | 100% | 3.4 | Performance Eligible AUM and Accrued Performance Fees In Q4 2024, PEAUM totaled R$45 billion, with accrued performance fees reaching R$437 million, a 17% increase, primarily from the Private Equity VCP strategy - In Q4 2024, Performance Eligible AUM (PEAUM) totaled R$45 billion[44] - Total accrued performance fees amounted to R$437 million, representing a 17% quarter-over-quarter increase[43] - The VCP strategy in Private Equity contributed R$377.3 million in accrued performance fees, accounting for 86% of the total[43] Performance Eligible AUM and Accrued Performance Fees by Business Segment | Business Segment | PEAUM Share (%) | Accrued Performance Fees Share (%) | | :--- | :--- | :--- | | Private Equity | 28% | 86% | | Global IP&S | 21% | 8% | | Credit | 20% | 6% | | Real Assets | 18% | 0% | | Equities | 13% | 0% | Fee Related Revenues Analysis In Q4 2024, Fee Related Revenues totaled R$218.4 million, up 84%, driven by management and advisory fees; full-year revenues grew 30% to R$564 million - In Q4 2024, total Fee Related Revenues amounted to R$218.4 million, an 84% year-over-year increase, primarily driven by growth in management and advisory fees[45][47] - Management fees totaled R$170 million, up 70% year-over-year, mainly due to contributions from the Compass and Lacan transactions, as well as organic fundraising in private equity (VCP IV) and infrastructure (VICC) strategies[45] - Advisory fees include fees from the corporate advisory business and one-time upfront fees for third-party distribution of alternative commitments in Global IP&S[46] - For fiscal year 2024, total Fee Related Revenues reached R$564 million, representing a 30% year-over-year increase[47] Key Financial Metrics (4Q24 Overview) In Q4 2024, FRE was R$79 million (R$1.23/share, +38%), PRE was R$16.5 million (R$0.26/share, +478%), and Adjusted DE was R$73.9 million (R$1.15/share, +16%) Fourth Quarter 2024 Key Financial Metrics | Metric (R$ million) | 4Q'23 | 4Q'24 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Fee Related Earnings (FRE) | 57 | 79 | +38% | | FRE per Share (R$/share) | 1.07 | 1.23 | +16% | | FRE Margin (%) | 48% | 36% | - | | Performance Related Earnings (PRE) | 3 | 16 | +478% | | PRE per Share (R$/share) | 0.05 | 0.25 | - | | PRE Margin (%) | 44% | 60% | - | | Adjusted Distributable Earnings (Adjusted DE) | 64 | 74 | +16% | | Adjusted DE per Share (R$/share) | 1.10 | 1.15 | - | | Adjusted DE Margin (%) | 42% | 27% | - | - FRE growth was primarily driven by organic and inorganic factors, leading to increased Global IP&S advisory fees and retroactive fees from VCP IV's final closing[50] - PRE growth stemmed mainly from realized performance in Global IP&S, Credit, and Real Assets (Argentina and Peru real estate funds)[50] Key Financial Metrics (Full Year Overview) For FY2024, FRE was R$248.4 million (R$4.42/share, +19%), PRE was R$21.8 million (R$0.36/share, +106%), and Adjusted DE was R$239.1 million (R$4.26/share, -3%) Full Year 2024 Key Financial Metrics | Metric (R$ million) | FY23 | FY24 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Fee Related Earnings (FRE) | 208 | 248 | +19% | | FRE per Share (R$/share) | 3.86 | 4.42 | +15% | | FRE Margin (%) | 48% | 44% | - | | Performance Related Earnings (PRE) | 11 | 22 | +106% | | PRE per Share (R$/share) | 0.14 | 0.36 | - | | PRE Margin (%) | 50% | 59% | - | | Adjusted Distributable Earnings (Adjusted DE) | 246 | 239 | (3)% | | Adjusted DE per Share (R$/share) | 4.54 | 4.26 | (6)% | | Adjusted DE Margin (%) | 44% | 35% | - | - FRE growth was primarily driven by strong management and advisory fee performance in 2024, along with the acquisitions of Compass, MAV, and Lacan[52] - Adjusted DE decreased by 3%, mainly due to lower financial income from cash positions, impacted by acquisitions, GP investment deployment, and foreign exchange fluctuations on net debt positions denominated in USD[52] Realized GP Investment and Financial Income In Q4 2024, realized financial income decreased 53% to R$10.3 million; for FY2024, realized GP investment income increased 32% to R$25.4 million, while financial income decreased 42% to R$49.3 million - In Q4 2024, realized financial income decreased by 53% year-over-year to R$10.3 million, primarily due to cash being used for capital calls in closed-end funds and acquisition-related payments, leading to a reduction in the liquid portion of the investment portfolio[53] - For fiscal year 2024, realized GP investment income increased by 32% to R$25.4 million, mainly benefiting from capital returns from FIP Infra Transmissão in Q2[53] - For fiscal year 2024, realized financial income decreased by 42% to R$49.3 million, also due to a reduction in the liquid investment portfolio[54] GP Commitments and Fair Value of Investments As of Q4 2024, total GP commitments were R$1.373 billion (50.3% called); fair value of GP investments was R$670.8 million, or R$10.52 per share - As of Q4 2024, Vinci Compass's total capital commitments to its own funds amounted to R$1.373 billion, primarily distributed across private equity, infrastructure, credit, and real estate sectors[57] - Total capital called was R$690.8 million, representing 50.3% of total committed capital[57] - The fair value of GP investments was R$670.8 million, or R$10.52 per share[59] - Realized GP investment income in Q4 was R$5 million, mainly from dividend distributions from REITs[58] Balance Sheet Highlights In Q4 2024, cash decreased to R$223.3 million, net investments grew to R$1.297 billion, and net cash and investments stood at R$876.7 million, or R$13.69 per share Balance Sheet Key Metrics (R$ million) | Metric | 3Q'24 | 4Q'24 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 534.4 | 223.3 | | Net Investments | 1,132.1 | 1,297.0 | | Liquid Assets | 570.0 | 626.3 | | GP Fund Investments | 562.1 | 670.8 | | Debt Obligations | (563.9) | (643.7) | | Net Cash and Investments | 1,102.6 | 876.7 | | Net Cash and Investments per Share (R$/share) | 20.85 | 13.69 | - Cash and cash equivalents decreased in Q4, primarily due to the completion of the Compass and Lacan transactions, which involved cash payments[60] - Net investments grew due to the integration of Compass's proprietary investments and the appreciation of GP fund investments[60] GP Commitments and GP Fund Investments by Business Segment | Business Segment | Total Committed Capital Share (%) | GP Fund Investment Fair Value Share (%) | | :--- | :--- | :--- | | Private Equity | 27% | 28% | | Credit | 19% | 19% | | Infrastructure | 17% | 17% | | REITs | 16% | 16% | | Real Estate | 10% | 13% | | Global IP&S | 4% | 4% | | Public Equities | 3% | 2% | | Forestry | 3% | 1% | Segment-Specific Financial Summaries This section details each business segment's financial performance, highlighting their individual contributions to the company's overall Fee Related Earnings (FRE) and Distributable Earnings (DE) for FY2024 Overview of Segment Earnings (FY24) For FY2024, FRE totaled R$248.4 million (Private Equity 38%, Real Assets 21%, Global IP&S 12%); Segment DE totaled R$307.5 million (Private Equity 30%, Real Assets 28%, Global IP&S 13%) Fiscal Year 2024 Segment Fee Related Earnings (FRE) Distribution | Business Segment | Share (%) | | :--- | :--- | | Private Equity | 38% | | Real Assets | 21% | | Global IP&S | 12% | | Credit | 10% | | Equities | 10% | | Corporate Advisory | 9% | Fiscal Year 2024 Segment Distributable Earnings (DE) Distribution | Business Segment | Share (%) | | :--- | :--- | | Private Equity | 30% | | Real Assets | 28% | | Global IP&S | 13% | | Credit | 12% | | Equities | 9% | | Corporate Advisory | 7% | Global Investment Products & Solutions (Global IP&S) Global IP&S FRE grew 239% to R$14.1 million in Q4 2024, PRE grew 902% to R$10 million, and total AUM reached R$255.4 billion, up 901% Global IP&S Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 19,468 | 101,945 | 424% | 224,753 | | Net Advisory Fees | 8 | 17,988 | 224750% | 19,045 | | Total Fee Related Revenues | 19,476 | 128,737 | 561% | 243,798 | | Fee Related Earnings (FRE) | 4,166 | 14,100 | 239% | 28,974 | | FRE Margin (%) | 21.4% | 10.9% | - | 11.9% | | Performance Related Earnings (PRE) | 1,000 | 10,169 | 902% | 15,005 | | PRE Margin (%) | 50.2% | 68.4% | - | 67.8% | | Total AUM (R$ million) | 26,255 | 255,403 | 901% | 255,403 | | Average Management Fee Rate (%) | 0.34% | 0.29% | - | 0.33% | - AUM growth was driven by inorganic expansion, portfolio appreciation, and positive foreign exchange movements[67] Global IP&S AUM Strategy Distribution | Strategy | Share (%) | | :--- | :--- | | TPD Alternative Products | 40% | | TPD Liquid Products | 25% | | Fund of Funds | 18% | | Global Solutions | 7% | | Segregated Accounts | 3% | | Other | 1% | Credit Credit FRE grew 30% in Q4 2024, PRE grew 106% to R$3.1 million, total AUM reached R$29.2 billion, up 296%, and the segment raised R$1.7 billion for the full year Credit Business Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 13,032 | 38,923 | 199% | 83,489 | | Total Fee Related Revenues | 13,032 | 38,947 | 199% | 83,792 | | Fee Related Earnings (FRE) | 5,500 | 7,139 | 30% | 25,826 | | FRE Margin (%) | 42.2% | 18.3% | - | 30.8% | | Performance Related Earnings (PRE) | 1,528 | 3,117 | 104% | 8,403 | | PRE Margin (%) | 55.8% | 62.9% | - | 59.5% | | Total AUM (R$ million) | 7,371 | 29,213 | 296% | 29,213 | | Average Management Fee Rate (%) | 0.75% | 0.80% | - | 0.87% | - FRE growth was primarily driven by increased management fees from SPS III and Credit Infra, along with strong deployment activity[71] - PRE growth was mainly driven by strong returns from Brazilian private credit funds[71] - In fiscal year 2024, the Credit business organically raised R$1.7 billion, including the first closing of SPS IV and continued successful fundraising for Vinci Credit Infra[72] Credit AUM Strategy Distribution | Strategy | Share (%) | | :--- | :--- | | Hard Currency | 38% | | Local Currency | 24% | | Structured Credit | 11% | | Real Estate & Infrastructure Credit | 10% | | Diversified Direct Lending | 9% | | Agribusiness | 6% | | Factoring & Accounts Receivable Financing | 2% | Private Equity Private Equity FRE reached R$29.2 million in Q4 2024, up 54%, driven by VCP IV's strong fundraising and final closing; total AUM reached R$17 billion, up 15% Private Equity Business Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 32,385 | 45,711 | 41% | 146,547 | | Total Fee Related Revenues | 32,386 | 45,711 | 41% | 146,647 | | Fee Related Earnings (FRE) | 18,917 | 29,200 | 54% | 75,127 | | FRE Margin (%) | 58.4% | 63.9% | - | 51.2% | | Total AUM (R$ million) | 15,803 | 17,000 | 15% | 17,000 | | Average Management Fee Rate (%) | 1.25% | 1.47% | - | 1.27% | - The VCP IV fund reached its final closing, with a total size of R$3.1 billion, becoming Vinci Compass's largest private equity fund and boasting the largest share of Brazilian institutional investors[77] Private Equity AUM Flagship Fund Distribution | Flagship Fund | Share (%) | | :--- | :--- | | VCP III | 53% | | VCP IV | 19% | | VCP II | 18% | | VIR IV | 6% | | Other | 4% | Equities Equities FRE was R$4 million in Q4 2024, down 63%, due to AUM decline from market volatility and increased expenses; total AUM reached R$14 billion, up 38% Equities Business Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 14,145 | 16,150 | 14% | 58,259 | | Total Fee Related Revenues | 14,145 | 17,098 | 21% | 59,216 | | Fee Related Earnings (FRE) | 8,279 | 3,898 | (53)% | 26,317 | | FRE Margin (%) | 58.5% | 22.8% | - | 44.4% | | Performance Related Earnings (PRE) | 840 | 1 | (100)% | 3,121 | | PRE Margin (%) | 33.7% | 174.5% | - | 55.1% | | Total AUM (R$ million) | 10,005 | 13,843 | 38% | 13,843 | | Average Management Fee Rate (%) | 0.65% | 0.61% | - | 0.63% | - FRE decline was primarily due to AUM reduction and lower management fees resulting from Brazilian stock market volatility, alongside increased expenses from the integration of Compass's regional equities business[84] Equities AUM Strategy Distribution | Strategy | Share (%) | | :--- | :--- | | Brazil | 69% | | Chile | 14% | | LatAm | 8% | | Argentina | 5% | Real Assets Real Assets FRE was R$12.9 million in Q4 2024, up 16%, driven by new product launches and inorganic growth; total AUM reached R$12 billion, up 6% Real Assets Business Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Management Fees | 20,946 | 25,304 | 21% | 97,183 | | Total Fee Related Revenues | 22,593 | 27,700 | 23% | 107,565 | | Fee Related Earnings (FRE) | 11,064 | 12,885 | 16% | 46,400 | | FRE Margin (%) | 49.0% | 46.5% | - | 43.1% | | Performance Related Earnings (PRE) | (504) | 3,333 | N/A | 4,275 | | PRE Margin (%) | N/A | 68.3% | - | 68.3% | | Total AUM (R$ million) | 11,230 | 11,702 | 4% | 11,702 | | Average Management Fee Rate (%) | 0.86% | 1.01% | - | 0.96% | - Organic FRE growth was driven by the launch of FDIRS and additional VICC commitments, while inorganic growth was positively impacted by Lacan and Compass real estate funds in Uruguay and Peru[88] Real Assets AUM Strategy Distribution | Strategy | Share (%) | | :--- | :--- | | Real Estate | 52% | | Infrastructure | 33% | | Forestry | 15% | Corporate Advisory Corporate Advisory net advisory fees grew 12% to R$19.4 million in Q4 2024 due to increased transaction activity; FRE for Q4 was R$11.9 million, and R$21.9 million for the full year Corporate Advisory Business Fourth Quarter & Full Year 2024 Financial Metrics (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY24 | | :--- | :--- | :--- | :--- | :--- | | Net Advisory Fees | 17,343 | 19,390 | 12% | 42,896 | | Total Fee Related Revenues | 17,343 | 19,390 | 12% | 42,896 | | Fee Related Earnings (FRE) | 9,373 | 11,866 | 27% | 21,937 | | FRE Margin (%) | 54.0% | 61.2% | - | 51.1% | | Segment Distributable Earnings (DE) | 9,373 | 11,866 | 27% | 21,937 | | Segment DE Margin (%) | 54.0% | 61.2% | - | 51.1% | - Net advisory fee growth was primarily due to increased transaction activity in Q4 2024[94] Financial Statements This section presents the company's consolidated financial statements, including the income statement, non-GAAP reconciliation, and balance sheet, providing a comprehensive view of its financial position and performance Income Statement For FY2024, total net service revenue was R$600.8 million (+32%), operating profit was R$270.2 million (+23%); however, net income decreased 47% to R$115.1 million due to increased non-operating expenses Fourth Quarter & Full Year 2024 Income Statement Key Data (R$ thousand) | Metric | 4Q'23 | 4Q'24 | YoY Change (%) | FY23 | FY24 | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Net Service Revenue | 125,442 | 245,858 | 96% | 454,420 | 600,779 | 32% | | Total Expenses | (65,291) | (150,348) | 130% | (235,373) | (330,542) | 40% | | Operating Profit | 60,151 | 95,510 | 59% | 219,047 | 270,237 | 23% | | GP Investment Income | 14,914 | 3,903 | (74)% | 26,018 | 16,063 | (38)% | | Financial Income | 22,046 | 10,308 | (53)% | 84,345 | 49,269 | (42)% | | Non-Operating Expenses | (1,924) | (39,827) | 1970% | (1,924) | (56,562) | 2840% | | Gross Profit | 78,210 | 10,770 | (86)% | 269,385 | 161,950 | (40)% | | Net Income | 63,384 | 549 | (99)% | 219,459 | 115,073 | (47)% | | Adjusted Net Income | 67,706 | 51,596 | (24)% | 231,566 | 185,884 | (20)% | Non-GAAP Reconciliation The company provides reconciliations from operating profit to FRE, PRE, and Segment DE, and from net income to Adjusted DE, for clearer business and cash distribution views Fourth Quarter & Full Year 2024 Non-GAAP Financial Metrics Reconciliation (R$ thousand) | Metric | 4Q'23 | 3Q'24 | 4Q'24 | FY23 | FY24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Profit | 60,151 | 54,803 | 95,510 | 219,047 | 270,237 | | Fee Related Earnings (FRE) | 57,297 | 53,819 | 79,028 | 208,433 | 248,397 | | Performance Related Earnings (PRE) | 2,854 | 984 | 16,482 | 10,614 | 21,840 | | Segment Distributable Earnings (Segment DE) | 65,275 | 59,342 | 109,150 | 238,930 | 307,451 | | Net Income | 63,384 | 41,369 | 549 | 219,459 | 115,073 | | Adjusted Distributable Earnings (Adjusted DE) | 63,641 | 57,104 | 73,946 | 245,836 | 239,056 | Balance Sheet As of December 31, 2024, total assets increased to R$3.585 billion, liabilities to R$1.643 billion, and equity to R$1.942 billion, driven by various asset and liability changes Balance Sheet Key Data (R$ thousand) | Metric | September 30, 2024 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 534,406 | 223,302 | | Financial Instruments (Fair Value) | 1,499,067 | 1,651,528 | | Trade Receivables | 73,036 | 227,951 | | Intangible Assets | 251,170 | 1,057,949 | | Total Assets | 2,457,666 | 3,585,051 | | Labor and Social Security Obligations | 81,772 | 191,063 | | Loans and Financing | 649,661 | 861,542 | | Total Liabilities | 1,149,181 | 1,643,008 | | Equity Capital | 1,405,559 | 2,097,712 | | Total Equity | 1,303,485 | 1,942,043 | | Total Liabilities and Equity | 2,457,666 | 3,585,051 | Supplemental Details This section provides additional detailed information on AUM rollforward analysis and investment records for various funds, offering deeper insights into the company's asset growth and fund performance AUM and Fee-Earning AUM Rollforward As of December 31, 2024, total AUM increased from R$70.4 billion to R$327 billion, primarily due to R$241.1 billion from acquisitions; FEAUM also grew from R$66.7 billion to R$321.4 billion AUM Rollforward Analysis for the Three Months Ended December 31, 2024 (R$ million) | Metric | Global IP&S | Credit | Private Equity | Equities | Real Assets | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | 24,330 | 9,067 | 15,803 | 10,856 | 10,338 | 70,395 | | Capital Subscriptions/(Returns) | - | 820 | 356 | - | (118) | 1,058 | | Acquisitions | 218,007 | 18,720 | - | 4,355 | 2,006 | 241,147 | | Net Inflows/(Outflows) | (2,011) | (742) | - | (200) | (14) | (3,047) | | FX Variation | 15,772 | 1,347 | 343 | 312 | 135 | 17,909 | | Appreciation/(Depreciation) | 1,305 | (60) | 258 | (1,361) | (644) | (501) | | Ending Balance | 255,403 | 29,213 | 16,760 | 13,883 | 11,702 | 326,961 | Fee-Earning AUM (FEAUM) Rollforward Analysis for the Three Months Ended December 31, 2024 (R$ million) | Metric | Global IP&S | Credit | Private Equity | Equities | Real Assets | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | 24,043 | 8,866 | 12,690 | 10,823 | 10,294 | 66,717 | | Capital Subscriptions/(Returns) | (4) | 823 | 358 | - | (118) | 1,057 | | Acquisitions | 215,477 | 18,340 | - | 4,316 | 2,006 | 240,138 | | Net Inflows/(Outflows) | (2,009) | (727) | - | (278) | (14) | (3,028) | | FX Variation | 15,733 | 1,315 | 343 | 310 | 135 | 17,836 | | Appreciation/(Depreciation) | 764 | (77) | 82 | (1,356) | (786) | (1,322) | | Ending Balance | 254,004 | 28,540 | 13,471 | 13,815 | 11,567 | 321,397 | Investment Records - Credit and Equities Funds The company disclosed investment performance for several credit and equities funds, with varied Q4 2024 and year-to-date results, some outperforming or underperforming benchmarks Credit and Equities Funds Investment Performance (R$ million) | Fund | Sub-Segment | NAV | 4Q'24 (%) | YTD (%) | 12 M (%) | 24 M (%) | Benchmark | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Vinci Total Return® | Equities | 228.6 | (10.1) | (11.5) | (11.5) | 12.2 | IPCA4 + Yield IMA-B5 | | Mosaico Strategy | Equities | 797.3 | (12.2) | (14.2) | (14.2) | 6.5 | IBOV | | Vinci Gas Dividendos FIA | Equities | 338.4 | (8.9) | (10.7) | (10.7) | 7.9 | IBOV® | | Compass CRECE+ | Equities | 158.4 | (2.0) | (2.5) | (2.5) | 9.2 | S&P/BMV IPC | | Compass Crecimiento | Equities | 628.5 | 50.6 | 166.3 | 166.3 | 245.3 | S&P MERVAL3 | | Compass Small Cap Chile | Equities | 1,082.2 | 0.6 | 9.5 | 9.5 | 12.6 | - | | Vinci Credito Imobiliario II | Credit | 721.5 | (0.9) | 2.4 | 2.4 | 18.8 | IPCA4+6% | | Vinci Energia Sustentável | Credit | 538.1 | (1.1) | 3.5 | 3.5 | 17.9 | IPCA4+6% | | Vinci Crédito Multiestratégia | Credit | 321.6 | 0.3 | 8.5 | 8.5 | 20.3 | CDI | | Compass Latam Corporate Debt Fund | Credit | 3,795.5 | (1.0) | 7.9 | 7.8 | 7.6 | CEMBI Broad Div | | Compass Latam High Yield USD | Credit | 1,848.6 | 0.8 | 11.3 | 11.3 | 10.1 | CEMBI Broad Div HY | | Compass +LIQG | Credit | 1,970.3 | 2.7 | 11.8 | 11.8 | 11.8 | PIP Cetes 28D | | Compass Credit Selection | Credit | 764.0 | 2.3 | 12.0 | 11.9 | 12.4 | CDI3 | | Compass Yield 30 | Credit | 1,868.8 | 2.3 | 12.9 | 12.8 | 13.9 | CDI- | | Compass Deuda Plus | Credit | 417.2 | (0.2) | 10.5 | 10.5 | 7.2 | - | | Compass Renta Fija-B | Credit | 850.5 | 0.4 | 3.7 | 3.6 | 3.6 | CBMBI Broad Div | | Benchmark | 4Q-24 (%) | YTD (%) | 12 M (%) | 24 M (%) | | | IPCA + Yield IMA-B3 | 3.1 | 11.6 | 11.6 | 23.5 | | | IBOV | (8.7) | (10.4) | (10.4) | 8.6 | | | S&P/BMV IPC7 | (4.7) | (11.0) | (10.9) | 0.9 | | | S&P MERVAL® | 49.3 | 172.5 | 170.3 | 252.9 | | | CDI | 2.7 | 10.9 | 10.9 | 25.3 | | | IPCA | 1.5 | 4.8 | 4.8 | 9.7 | | | CEMBI Broad Div12 | (1.1) | 8.7 | 8.7 | 9.0 | | | CEMBI Broad Div HY11 | (0.1) | 11.6 | 11.6 | 11.3 | | | PIP Cetes 28D12 | 2.5 | 11.4 | 11.4 | 11.6 | | Investment Records - Global IP&S and Real Assets Funds The company disclosed investment performance for Global IP&S and Real Assets funds, with Global IP&S funds generally stable, while some listed REITs underperformed in Q4 and year-to-date Global IP&S and Real Assets Funds Investment Performance (R$ million) | Fund | Sub-Segment | NAV | 4Q'24 (%) | YTD (%) | 12 M (%) | 24 M (%) | Benchmark | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Vinci Multiestratégia FIM | Global IP&S | 143.0 | 2.4 | 8.6 | 8.6 | 22.3 | CDI4 | | Allas Strategy | Global IP&S | 229.4 | 4.2 | 8.9 | 8.9 | 19.1 | CDI+ | | Vinci Valorem FIM | Global IP&S | 926.7 | 2.4 | 7.6 | 7.6 | 20.3 | IMA-B5 | | Equilibrio Strategy | Global IP&S | 1,229.0 | 2.7 | 7.5 | 7.5 | 19.8 | IPCA | | Vinci Retorno Real FIM | Global IP&S | 175.0 | 2.3 | 7.0 | 7.0 | 19.9 | IMA-Be | | VISC11 | Real Assets (listed REIT) | 2,798.1 | (8.6) | (21.6) | (21.6) | 11.3 | IFIX | | VILG11 | Real Assets (listed REIT) | 1,118.8 | (9.7) | (18.3) | (18.3) | (11.9) | IFIX | | VINO11 | Real Assets (listed REIT) | 404.9 | 0.8 | (27.7) | (27.7) | (36.8) | IFIX® | | VIF111 | Real Assets (listed REIT) | 54.4 | (8.9) | (17.5) | (17.5) | 20.8 | IFIX | | VIUR11 | Real Assets (listed REIT) | 160.3 | (3.8) | (26.1) | (26.1) | (5.1) | IFIX | | VCRI11 | Real Assets (listed REIT) | 117.9 | (14.8) | (19.4) | (19.4) | (1.2) | IFIX | | VICA11 | Real Assets (REIT) | 380.0 | 0.5 | 1.2 | 1.2 | 1.0 | IFIX® | | VINCI FOF IMOBILIARIO FIM CP | Real Assets (REIT) | 53.7 | (2.4) | (1.2) | (1.2) | - | IFIX | | VIGT11 | Real Assets (listed REIT) | 252.9 | (49.4) | (58.6) | (62.5) | (47.8) | - | | Benchmark | 4Q'24 (%) | YTD (%) | 12 M (%) | 24 M (%) | | | CDI | 2.7 | 10.9 | 10.9 | 25.3 | | | IMA-B5 | 0.8 | 6.2 | 6.2 | 19.0 | | | IPCA® | 1.5 | 4.8 | 4.8 | 9.7 | | | IFIX | (5.7) | (5.9) | (5.9) | 8.7 | | Investment Records - Closed End Funds The company disclosed performance for various closed-end funds, including Private Equity, Credit, and Real Assets strategies, showcasing diverse MOIC and IRR, with some achieving significant value creation Closed End Funds Historical Investment Performance (R$ million) | Fund | Sub-Segment | Investment Year | Committed Capital | Invested Capital | Realized/Partially Realized | Unrealized | Total Value | Gross MOIC (BRL) | Gross IRR (BRL) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fund 1 | Private Equity | 2004 | 1,415 | 1,206 | 5,131 | 79 | 5,210 | 4.3x | 71.5% | | VCP II | Private Equity | 2011 | 2,200 | 2,658 | 1,844 | 2,402 | 4,246 | 1.6x | 6.0% | | VCP III | Private Equity | 2018 | 4,000 | 2,347 | 65 | 5,347 | 5,412 | 2.2x | 30.8% | | VCP IV | Private Equity | 2022 | 3,089 | 335 | - | 504 | 504 | 1.5x | - | | SPS Strategy | Credit | - | 1,870 | 2,320 | 1,399 | 2,052 | 3,451 | 2.7x | 24.8% | | MAV Strategy | Credit | - | 370 | 370 | 131 | - | 131 | 0.4x | 19.9% | | Lacan Strategy | Real Assets | - | 1,275 | 1,073 | 380 | 1,501 | 1,881 | 1.8x | 12.5% | | FIP Transmissão® | Real Assets | 2017 | 211 | 104 | 289 | 87 | 376 | 3.6x | 56.6% | | Vinci Credit Infra12 | Credit | 2022 | 1,798 | 1,152 | - | 681 | 681 | 1.20x | NM | Shareholder Information This section provides key information for shareholders, including details on dividends, share repurchase programs, and the company's share capital structure Dividends and Share Repurchase In Q4 2024, Adjusted DE was R$1.15/share ($0.20); the company declared a quarterly dividend of $0.15/share, with $8.5 million remaining for share repurchases - In Q4 2024, Adjusted Distributable Earnings (Adjusted DE) were R$1.15 per share ($0.20)[111] - The company declared a quarterly dividend of $0.15 per share, with a record date of March 13, 2025, and a payment date of March 27, 2025[111] - As of December 31, 2024, the remaining authorized amount under the share repurchase program was $8.5 million[111] Share Capital Structure In October 2024, 11,783,384 shares were issued for Compass Group; total common shares outstanding were 64,046,355, comprising Class B and Class A shares - In October 2024, the company issued 11,783,384 shares for Compass Group[111] Share Structure (as of Q4 2024) | Share Type | Quantity | | :--- | :--- | | Class B Shares | 14,466,239 | | Class A Shares | 49,580,116 | | Total Common Shares | 64,046,355 | - As of December 31, 2024, the public float consisted of 11,795,538 Class A common shares[122] Notes and Definitions This section provides essential notes and definitions for key financial and business terms used throughout the report, ensuring clarity and comprehensive understanding for all readers Glossary of Terms This section defines key financial and business terms like AUM, FRE, PRE, DE, MOIC, and IRR, ensuring transparency and understanding of the report's content - AUM (Assets Under Management) is defined as the fair market value of all funds and managed accounts administered by Vinci Compass, along with capital callable from investors and the value of limited partners' co-investments[123] - FRE (Fee Related Earnings) measures the baseline performance of the business, excluding performance fees and non-recurring operating expenses[123] - DE (Distributable Earnings) is used to assess the company's ability to distribute dividends to shareholders[123] - MOIC (Multiple on Invested Capital) and IRR (Internal Rate of Return) are key metrics for measuring investment returns[124]